Which of the Following Statements Is True

question 84

Multiple Choice

Which of the following statements is true?

• A)If the donor does not pay the gift tax, the donee is personally liable for the tax.
• B)When a married couple elects gift splitting, each spouse is potentially liable for 50% of the gift tax.
• C)Gift tax returns are due March 15 in the year following the gift.
• D)Donors can request an automatic extension of time to pay their gift tax even when they don't request to have an income tax extension.

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Definitions:

Periodic Inventory System

An inventory accounting system where updates to inventory levels are made periodically, typically at the end of an accounting period, rather than after each transaction.

Gross Profit

The difference between sales revenue and the cost of goods sold before deducting operating expenses, interest, and taxes.

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, culminating in the net income or loss for that period.

Periodic Inventory System

An inventory system where inventory levels and cost of goods sold (COGS) are updated in the accounting records at the end of an accounting period.